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Walmart-Houston-9-05 SPECIAL REPORT Wal-Mart Pricing study round X Another Vision of the Future? Photo courtesy of The first time ever a supermarket carrying a full line of product beat out the Wal-Mart Supercenter as pricing king. BYJIMPREVOR ith this iteration, the PRODUCE BUSINESS Wal-Mart ton. It is a significant occurrence. As we have studied market Pricing Report reaches several milestones. First, after market across the country, every conventional supermar- we hit double digits. Yes this time we journey to ket chain has failed to provide consumers with a better price Houston, TX, for our tenth city to be surveyed point than Wal-Mart’s Supercenter concept. and analyzed. Second, as we selected Houston as A&P’s Food Basics beat out Wal-Mart in Detroit, but in order wour target subject this month, it means for the first time we are to include Food Basics in our market basket study, we had to returning to a state to look at a second city. The last time we vis- severely restrict the market basket because Food Basics did not ited Texas, it was to study Dallas. Third, and most important, for carry the full range of items we would normally study. the first time ever a supermarket carrying a full line of product Back in Dallas the Wal-Mart Supercenter lost as well, but it beat out the Wal-Mart Supercenter as pricing king. It was close, was to corporate cousin Wal-Mart’s Neighborhood Market. That less than a third of a percentage point — in fact a statistical tie. small win we attributed to a fluke — either some Manager’s But in the PRODUCE BUSINESS Wal-Mart Pricing Report, as in horse- Special that was running the day of our study or an error in shoes and politics, close doesn’t count. pricing. Generally the prices in the Neighborhood Market and So Fiesta Mart, the chain popularly perceived as being ori- the Supercenter were identical. ented to the Hispanic market, gets to carry the trophy in Hous- In some ways the outcome is surprising. HEB is widely rec- 22 PRODUCE BUSINESS SEPTEMBER Wal-Mart Supercenter vs 3 Chains Price Comparison Houston Texas Prices Available To The General Public Produce Item Wal-Mart HEB % Over Kroger % Over Fiesta % Over Supercenter Wal-Mart Wal-Mart Wal-Mart Apples - Red Delicious, Large $0.88 $0.99 12.500% $0.99 12.500% $0.9912.500% Asparagus $2.93 $2.99 2.048% $2.99 2.048% $3.89 32.765% Avocados, Small $0.50 $0.78 56.000% $0.99 98.000% $0.9998.000% Bananas - Yellow $0.38 $0.39 2.632% $0.39 2.632% $0.40 4.386% Broccoli Crowns $1.44 $1.29 -10.417% $1.69 17.361% $1.7924.306% Cabbage - Green $0.48 $0.44 -8.333% $0.44 -8.333% $0.49 2.083% Cabbage - Red $0.64 $0.69 7.812% $0.69 7.812% $0.59 -7.813% Cantaloupe - Whole $1.50 $1.79 19.333% $2.99 99.333% $1.6912.667% Carrots - Whole 1# Bag $0.58 $0.69 18.966% $0.59 1.724% $0.59 1.724% Cauliflower $2.14 $1.99 -7.009% $1.99 -7.009% $2.49 16.355% Celery $1.14 $1.19 4.386% $1.19 4.386% $1.29 13.158% Cherries $2.96 $4.99 68.581% $4.99 68.581% $3.9934.797% Coleslaw - 1# Bag $1.38 $0.89 -35.507% $1.49 7.971% $1.59 15.217% Cucumbers - Regular $0.50 $0.58 16.000% $0.59 18.000% $0.33-34.000% Eggplant $1.54 $1.29 -16.234% $1.59 3.247% $1.19 -22.727% Garlic $0.39 $0.50 26.904% $0.50 26.904% $0.4924.365% Grapefruit - Red $0.68 $0.89 30.882% $0.59 -13.235%$0.50 -26.471% Grapes - Green Seedless $0.98 $1.99 103.061% $1.79 82.653% $1.2931.633% Grapes - Red Seedless $1.44 $1.59 10.417% $1.69 17.361% $1.6917.361% Green Onions $0.94 $0.59 -37.234% $0.59 -37.234%$0.50 -46.809% Honeydew - Whole $2.98 $2.49 -16.443% $2.99 0.336% $1.69 -43.289% Jar Fruit - Del Monte $2.98 $2.99 0.336% $3.99 33.893% $2.990.336% Kiwi $0.25 $0.33 32.000% $0.33 32.000% $0.3332.000% Lemons $0.28 $0.25 -10.714% $0.25 -10.714%$0.20 -28.571% Lettuce - Green Leaf $1.18 $1.39 17.797% $1.49 26.271% $0.99-16.102% Lettuce - Iceberg $0.77 $1.39 80.519% $1.19 54.545% $0.9928.571% Lettuce - Red Leaf $1.18 $1.39 17.797% $1.49 26.271% $0.99-16.102% Lettuce - Romaine $1.18 $1.39 17.797% $1.49 26.271% $0.99-16.102% Limes - Bulk $0.15 $0.16 6.667% $0.25 66.667% $0.13-16.667% Mangos, Red Small $0.33 $0.50 51.515% $0.50 51.515% $0.99200.000% Mushrooms - White Bulk $2.32 $3.49 50.431% $2.99 28.879% $2.5911.638% Mushrooms - White Packaged$1.34 $1.49 11.194% $1.79 33.582% $1.6926.119% Nectarines - Regular $1.67 $1.99 19.162% $1.99 19.162% $0.99-40.719% Onions - Red $0.93 $1.59 70.968% $1.29 38.710% $0.996.452% Onions - Yellow $0.63 $0.99 57.143% $0.79 25.397% $0.7925.397% Onions - Yellow 3# Bag $1.74 $1.79 2.874% $3.49 100.575% $1.49-14.368% Oranges - Navel Bulk $0.48 $0.50 4.167% $0.50 4.167% $0.50 4.167% Peaches - Regular $0.99 $1.79 80.808% $1.69 70.707% $0.990.000% Pears - Asian $1.24 $1.79 44.355% $1.99 60.484% $0.99-20.161% Peppers - Bell Orange Hot $1.68House $1.29 -23.214% $1.99 18.452% $1.29-23.214% Peppers - Bell Red Hot House$1.68 $1.29 -23.214% $1.99 18.452% $1.29-23.214% Peppers - Bell Yellow Hot $1.68House $1.29 -23.214% $1.99 18.452% $1.29-23.214% Peppers - Bell Green $0.68 $0.99 45.588% $0.69 1.471% $0.50 -26.471% Plums - Regular $1.67 $1.99 19.162% $1.99 19.162% $0.99 -40.719% Potatoes - Red Bulk $0.78 $0.99 26.923% $0.99 26.923% $0.69 -11.538% Potators - Russet 5# Bag $1.57 $1.99 26.752% $1.99 26.752% $1.49 -5.096% Potatoes - Russet Bulk $0.73 $0.88 20.548% $0.89 21.918% $0.50 -31.507% Potatoes - White Bulk $0.73 $0.89 21.918% $0.99 35.616% $0.69 -5.479% Radishes $1.44 $0.99 -31.250% $1.29 -10.417% $0.59 -59.028% Salad - Garden Bag - 1# $1.50 $2.29 52.667% $1.99 32.667% $2.19 46.000% Salad - Spring Bag - 5 oz $2.53 $2.49 -1.581% $2.99 18.182% $2.59 2.372% Spinach - Bulk $0.94 $1.29 37.234% $1.29 37.234% $0.99 5.319% Squash - Zucchini $1.53 $1.29 -15.686% $1.99 30.065% $0.50 -67.320% Strawberries Clamshell 1# $2.67 $2.49 -6.742% $3.99 49.438% $2.39 -10.487% Tomatoes - Hothouse $0.78 $1.79 129.487% $2.69 244.872% $1.99 155.128% Tomatoes - Roma/Plum $0.74 $1.59 114.865% $1.49 101.351% $1.29 74.324% Yams $0.88 $0.88 0.000% $0.99 12.500% $0.69 -21.591% Market Basket Total $70.25 $80.94 15.211% $91.47 30.199% $70.02 -0.331% Source: U.S. Marketing Services ognized as one of Wal-Mart’s toughest And Kroger, with its enormous nation- and most successful competitors, albeit well against Wal-Mart. That may be true, al buying power, seems to simply not regionally. Industry insiders report that but what they don’t have is the lowest care —the Houston store in this study HEB has highly effective merchandising price point. HEB came in at 15.21% over comes in 30% over Wal-Mart! that has enabled the chain to compete Wal-Mart’s prices. Fiesta Mart’s price competitiveness is SEPTEMBER 2005 PRODUCE BUSI - 23 in a way surprising. If you look at its pro- great merchants, often bought at premi- motions they don’t focus on price. Its slo- um prices, lost their distinctiveness gan is “Your International Store”, and it when integrated into larger chains’ distri- focuses on the customer experience, as it bution and logistics apparatus. says in its promotions: “Our approach is In this case, because Fiesta Mart and a simple one; by blending our variety of Grocers Supply Co. were in related but product selection and our special brand different businesses, it seems like they of customer service with an authentic have synced together well with Grocers ‘fiesta’ atmosphere, we provide a unique Supply Co. providing the heft and logis- grocery shopping experience...” tics efficiency needed to keep costs low It is worth noting that in promotions and Fiesta Mart providing the merchan- Fiesta Mart, the chain popularly perceived as being ori- ented to the Hispanic market, gets to carry the trophy in Houston. filled with claims of offering “...the high- dising flair to keep the stores fun.
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